nep-bec New Economics Papers
on Business Economics
Issue of 2023‒10‒30
twelve papers chosen by
Vasileios Bougioukos, London South Bank University

  1. Robot Imports and Firm-Level Outcomes By Alessandra Bonfiglioli; Rosario Crinò; Herald Fadinger; Gino Gancia
  2. Big data analytics and exports: Evidence for manufacturing firms from 27 EU countries By Wagner, Joachim
  3. Self-Employment Within the Firm By Vittorio Bassi; Jung Hyuk Lee; Alessandra Peter; Tommaso Porzio; Ritwika Sen; Esau Tugume
  4. Green Goods in Finland’s Manufacturing By Kuosmanen, Natalia; Pajarinen, Mika
  5. Multinational Production and Intra-firm Trade By Alviarez, Vanessa; Saad, Ayhab
  6. The Productivity Effects of Regional Anchors on Local Firms in Swedish Regions between 2007 and 2019 – Evidence from an Expert-informed Machine-Learning Approach By Nilsson, Magnus; Schubert, Torben; Miörner, Johan
  7. Production of Green Goods is Concentrated in High-tech Industries By Kuosmanen, Natalia; Pajarinen, Mika
  8. The elusive impact of R&D grants on firm productivity By Fernando Alexandre; Diogo Ferreira; Sandro Mendonça; Miguel Portela
  9. Does Economic Freedom Moderate Perceived Corruption for Firms in India? By Dutta, Nabamita; Kar, Saibal; Stivers, Adam
  10. Minimum Wages, Wage Dispersion and Financial Constraints in Firms By Arabzadeh, Hamzeh; Balleer, Almut; Gehrke, Britta; Taskin, Ahmet Ali
  11. Social Skills and the Individual Wage Growth of Less Educated Workers By Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel
  12. The Effectiveness of Management Training Programs: A Meta-Analytic Review By Busso, Matías; Park, Kyunglin; Irazoque, Nicolás

  1. By: Alessandra Bonfiglioli; Rosario Crinò; Herald Fadinger; Gino Gancia
    Abstract: We use French data over the 1994-2013 period to study how imports of industrial robots affect firm-level outcomes. Guided by a simple model, we develop a novel empirical strategy to identify the causal effects of robot adoption. Our results suggest that, while demand shocks generate a positive correlation between robot imports and employment at the firm level, exogenous exposure to automation leads to job losses. We also find that robot exposure increases labor productivity and some evidence that it may raise the relative demand for high-skill professions.
    Keywords: Automation, Displacement, Firms, Robots
    JEL: J23 J24 O33 D22
    Date: 2023–10
  2. By: Wagner, Joachim
    Abstract: The use of big data analytics (including data mining and predictive analytics) by firms can be expected to increase productivity and reduce trade costs, which should be positively related to export activities. This paper uses firm level data from the Flash Eurobarometer 486 survey conducted in February - May 2020 to investigate the link between the use of big data analytics and export activities in manufacturing enterprises from the 27 member countries of the European Union. We find that firms which use big data analytics do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated big data analytics premia for exports are statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of these premia can be considered to be large. Successful exporters tend to use big data analytics.
    Keywords: Big data analytics, exports, firm level data, Flash Eurobarometer 486
    JEL: D22 F14
    Date: 2023
  3. By: Vittorio Bassi; Jung Hyuk Lee; Alessandra Peter; Tommaso Porzio; Ritwika Sen; Esau Tugume
    Abstract: We collect time-use data for entrepreneurs and their workers in over 1, 000 manufacturing firms in urban Uganda. We document limited labor specialization within the firm for establishments of all sizes and argue that this is likely due to the prevalence of product customization. We then develop a general equilibrium model of task assignment within the firm, estimate it with our data, and find large barriers to labor specialization. This setting is close, in terms of aggregate productivity and firm scale, to an extreme benchmark in which each firm is just a collection of self-employed individuals sharing a production space. Given how firms are organized internally, the benefits from alleviating other frictions that constrain firm growth are muted: most African firms resemble artisanal workshops whose business model is not easily scalable.
    JEL: L23 L25 O11 O14 O17
    Date: 2023–09
  4. By: Kuosmanen, Natalia; Pajarinen, Mika
    Abstract: Abstract This report examines the production of green goods in Finland’s manufacturing sector. Our findings reveal a notable concentration of green products to high-tech industries. While most firms maintain their green product portfolios stable over time, multi-product firms tend to expand their green product portfolios more actively. Large firms stand out with active management of their green goods portfolios, discontinuing some green products while introducing new ones. Additionally, we examine firm characteristics that associate with firms’ engagement in the production of green goods. We find a positive correlation between production of green products and factors such as labor productivity, product diversity, and multi-industry operations.
    Keywords: Environmental goods, Green products, Firm renewal, Manufacturing industries
    JEL: C23 L60 O44 Q54 Q55 Q56
    Date: 2023–10–07
  5. By: Alviarez, Vanessa; Saad, Ayhab
    Abstract: Intra-firm trade, from parents to affiliates, has been combined with standard models of multinational production (MP) to deliver gravity-style predictions for foreign affiliates' sales. Nonetheless, the evidence shows that intra-firm trade is concentrated among a small set of large multinational firms. Using firm-level data from 35 countries, we document that only firms belonging to multinational corporations (MNCs) in the upper tail of the firms size distribution are significantly affected by the distance to their parents. We present a simple framework featuring MNCs selection into intra-firm trade and derive the analytical gravity equations that are consistent with the empirical findings.
    Keywords: Intra-firm trade;Multinational Production
    JEL: F12 F23
    Date: 2022–11
  6. By: Nilsson, Magnus (CIRCLE, Lund University); Schubert, Torben (CIRCLE, Lund University); Miörner, Johan (CIRCLE, Lund University)
    Abstract: This paper analyses the impact of regional anchors on local firms in Swedish regions. Departing from previous idiographic research, we adopt a nomothetic research design relying on a stepwise expert-informed supervised machine learning approach to identify the population of anchor firms in the Swedish economy between 2007 and 2019. We find support for positive anchor effects on the productivity of other firms in the region. These effects are moderated by regional and anchor conditions. We find that the effects are greater when there are multiple anchors within the same industry and that the effects are larger in economically weaker regions.
    Keywords: anchor-tenant; productivity; machine learning; anchor firms; Sweden
    JEL: D24 O30 R11 R12
    Date: 2023–10–10
  7. By: Kuosmanen, Natalia; Pajarinen, Mika
    Abstract: Abstract The production of green goods in Finland’s manufacturing is concentrated within high-tech industries, particularly in the manufacturing of computer, electronic and optical products, as well as electrical equipment. Many firms tend to maintain a consistent portfolio of green products over time. Active expansion of green product portfolios is more common among large and multi-product firms. Furthermore, there is a positive correlation between labor productivity and production of green products. Although the production of green goods constitutes a relatively modest share of Finland’s overall manufacturing output, its role is steadily increasing over time.
    Keywords: Environmental goods, Green products, Firm renewal, Manufacturing industries
    JEL: C23 L60 O44 Q54 Q55 Q56
    Date: 2023–10–07
  8. By: Fernando Alexandre (NIPE/Center for Research in Economics and Management, University of Minho, Portugal); Diogo Ferreira (NIPE/Center for Research in Economics and Management, University of Minho, Portugal); Sandro Mendonça (Business Research Unit (BRU-IUL), University Institute of Lisbon; Research Unit on Complexity and Economics (UECE), Research in Economics and Mathematics (REM), Lisbon School of Economics & Management (ISEG), University of Lisbon; Science Policy Research Unit (SPRU), University of Sussex.); Miguel Portela (NIPE/Center for Research in Economics and Management, University of Minho, Portugal; IZA, Bonn)
    Abstract: This paper evaluates the effectiveness of R&D subsidies, provided by the European Regional Development Funds, on firms’ productivity. Using detailed longitudinal firm-level data covering the period 2007-2019, we employ state of the art differences-in-differences estimators to evaluate the impacts of R&D grants. Positive causal effects on gross value added and labour productivity are discernible for micro- and small-sized firms participating in co-promotion but not in individual projects. However, these effects seem to be elusive. No evidence of a positive effect of these grants on firm performance for medium- and large-sized firms or for individual R&D projects is found. This investigation contributes to a more comprehensive understanding of the relative effectiveness of productivity enhancement programs.
    Keywords: R&D grants; productivity; European funds; co-promotion
    JEL: D22 H25 L25 L52
    Date: 2023
  9. By: Dutta, Nabamita (University of Wisconsin, La Crosse); Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Stivers, Adam (University of Wisconsin, La Crosse)
    Abstract: Available wisdom suggests that a negative relationship prevails between economic freedom and perceived corruption among firms. However, the relationship is far from linear and a number of complex interactions make it fairly nuanced. We show that greater competition may accentuate the problem of corruption. This is contrary to the general observation that regulations create conditions for corrupt practices. This study uses a broad-based survey for India to examine the role of economic freedom in influencing perceived corruption. The firm-level data helps to explore the relationship between economic freedom across Indian states and the perceived corruption in the formal sector. A statistically significant negative relationship as we obtain implies a fall in perceived corruption as a function of rise in contemporaneous and lagged economic freedom. These results hold when we design matching models and add a number of covariates with potentially opposite impact overall. The empirical structure clearly highlights the process of identification and shows that small and young firms and those with sole ownership perceive greater benefits from higher economic freedom. However as claimed above, older firms perceive higher corruption when economic freedom is higher. This lends support to the idea that competition facilitated by economic freedom can increase rent seeking behavior. Our study contributes to the literature by emphasizing that the relationship between economic freedom and corruption in India is layered, with firm characteristics playing a crucial role.
    Keywords: perceived corruption, economic freedom, firm size, ownership, India
    JEL: D73 E26 J54 L11 P37
    Date: 2023–09
  10. By: Arabzadeh, Hamzeh (RWTH Aachen University); Balleer, Almut (RWTH Aachen University); Gehrke, Britta (Freie Universität Berlin); Taskin, Ahmet Ali (Institute for Employment Research (IAB), Nuremberg)
    Abstract: This paper studies how minimum wages affect the wage distribution if firms face financial constraints. Using German employer-employee data and firm balance sheets, we document that the within-firm wage dispersion decreases more with higher minimum wages when firms are financially constrained. We introduce financial frictions into a search and matching labor market model with stochastic job matching, imperfect information, and endogenous effort. In line with the empirical literature, the model predicts that a higher minimum wage reduces hirings and separations. Firms become more selective such that their employment and wage dispersion fall. If effort increases strongly, firms may increase employment at the expense of higher wage dispersion. Financially constrained firms are more selective and reward effort less. As a result, within-firm wage dispersion and employment in these firms fall more with the minimum wage.
    Keywords: minimum wage, wage dispersion, financial frictions, search and matching, unemployment
    JEL: J31 J38 J63 J64
    Date: 2023–09
  11. By: Aghion, Philippe (LSE); Bergeaud, Antonin (HEC Paris); Blundell, Richard (University College London); Griffith, Rachel (University of Manchester)
    Abstract: We use matched employee-employer data from the UK to highlight the importance of social skills, including the ability to work well in a team and communicate effectively with co-workers, as a driver for individual wage growth for workers with few formal educational qualifications. We show that lower educated workers in occupations where social skills are more important experience steeper wage growth with tenure, and also higher early exit rates, than equivalent workers in occupations where social skills are less important. Moreover, the return to tenure in occupations where social skills are important is stronger in firms with a larger share of higher educated workers. We rationalize our findings using a model of wage bargaining with complementarity between the skills and abilities of less educated workers and the firm's other assets.
    Keywords: team work, social skills, individual wage growth, firm pay premium
    JEL: J31 J24 L25
    Date: 2023–09
  12. By: Busso, Matías; Park, Kyunglin; Irazoque, Nicolás
    Abstract: We conduct a meta-analysis of 44 studies and 68 different managerial skills training programs, with the aim of identifying program characteristics that can lead to more effective public policies promoting firm growth and entrepreneurship. We synthesize 431 estimates to assess the effects of these programs on firm performance. Our findings show that, on average, managerial skills development programs have positive returns on management practices, firm productivity, profits, and survival. We also examine how program and participant specifications affect program effectiveness. Our analysis suggests that, on average, business training programs focused on human resources, soft skills, marketing, and finance-accounting, especially when organized by local organizations, tend to result in better firm performance. Moreover, training of potential entrepreneurs and managers in specifically targeted sectors such as agriculture, manufacturing, or services was more likely to result in improvement compared to non-targeted programs. Finally, our results indicate that programs that involve both male and female participants are more likely to enjoy higher effects from managerial training interventions.
    JEL: J24 L25 M13
    Date: 2023–04

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